Policy | Security | Investigation

manager

January 08, 2010

Investigators engaged in electronic discovery should be mindful of posted terms, conditions, EULAs, labels, notices, warnings, banners, contracts, agreements and no-trespassing signs. They can have legal effect in the electronic world, and may be binding on an investigator who encounters them.

While off-duty, restaurant employees maintained a password-protected MySpace forum, labeled as “talk about all the crap/drama/and gossip occurring in our workplace, without having to worry about outside eyes prying in.” Pietrylo created and maintained the forum, explicitly designated it as “invitation only,” and distributed passwords to a limited number of employees. One of these employees gave her password (whether voluntarily or otherwise is unclear) to restaurant management. Management accessed the forum, and discovered . . .

November 12, 2009

For honest people, email records can often be their best defense. Ask Matthew Tannin and Ralph Cioffi, former hedge fund managers for Bear Stearns. Their detailed email records persuaded a criminal jury to acquit them. That is, the jury could not find them guilty of fraud or dishonesty, as prosecutors alleged.

Thank goodness Bear Stearns did not follow the common legal advice to destroy email quickly. Many lawyers recommend deleting email and text messages quickly because they can provide adversaries scraps of conversation that can be misconstrued and taken out of context.

Many lawyers and archivists recommend, for example, that email systems be configured to purge email, by default, after only 15 days or 30 days. Such recommendations are always supplemented with the requirement that employees do something that is impractical – i.e. read all of their emails and promptly take affirmative action to keep those that are important records while allowing the others to be purged. Experience shows that requirement is routinely ignored in practice because employees just don't have time to follow it.

In the Tannin-Cioffi case, prosecutors said the defendants were dishonest and lying to fund investors. As evidence, the prosecutors pointed the jury to small passages clipped from emails. In one e-mail, Tannin observed “simply no way for [the fund] to make money – ever.” Prosecutors said this statement proved Tannin lied to investors because a few days later he expressed on a conference call his comfort with the fund’s prospects. Amir Efrati and Peter Lattman, “U.S. Loses Bear Fraud Case,” Wall St. Journal, Nov. 11, 2009.

Some lawyers think juries are so dumb they will consider no more evidence than a few words from an email.

But in fact the Tannin-Cioffi jury considered a lot more. It evaluated the context of that snippet of words. It weighed the entire e-mail from which the snippet was clipped. Amir Efrati, “Bear Loss Besets Prosecutors,” Wall St. Journal, Nov. 12, 2009. Further, the jury considered many other emails between the men. The jury noted for example that during the time that the prosecutors said the men had given up on the fund, their email records suggested they were working furiously hard to save it. The jury focused on one e-mail exchange showing them working at 4 in the morning!

Notice how the detailed timestamp (metadata) on the email saved these alleged white collar criminals from jail. Old fashioned paper letters did not record such a rich diary of business activities. Here the electronic diary depicted the defendants doing the right thing.

For good business people, lengthy, complete email and text message records -- including all the metadata -- are a friend.

The only people who have incentive to destroy their electronic message records quickly are mobsters, the Mafia. They of course are motivated to toss all the smoking guns and dead bodies into the river.

Update: Former AIG executive Joseph Cassano is also thankful for plentiful records. Records saved him from criminal prosecution for allegedly hiding problems with AIG's mortgage-related investments in 2007. Although prosecutors were on the verge of indicting him, notes taken by outside auditor PwC suggested that he had disclosed the problems.

–Benjamin Wright

Mr. Wright often serves as a public speaker on technology law for groups like CPA societies or Institute of Internal Auditors. Here is an ARMA podcast describing Messaging Architects' work in e-mail archiving, including its workshop (led by Mr. Wright) for development of an email records policy in an enterprise.

May 09, 2009

By law, employers generally need to keep records of employment decisions. So when the boss conveys a pink slip by way of Facebook, the employer needs a legal record of it.

What? Fire someone by Facebook . . . a posting on a wall? Would a manager do that? Yes. A spa in Canada (British Columbia) used Facebook to notify Crystal Bell of her job termination.

The history of electronic messaging tells a story about business records. As each new form of message comes along, we initially doubt you can conduct business with such a flimsy thing. Fax as a medium for transacting serious business? No way, people thought in the early 1980s. But as time passed –- and as court cases enforced fax contracts -- we grew more comfortable with fax as a business tool. Today, fax is considered a responsible, even conservative medium for transmitting signed agreements and binding business records.